A "landmark" building project mothballed for months remains on ice but could be revived in the New Year.

The Nuovo scheme, previously known as Sarah Point, was one of three Manchester schemes that ground to a halt after the demise of developer Bashar Issa's property empire.

Last May, the M.E.N revealed UK Land & Property had struck a £13m deal to complete the residential development, on Great Ancoats street, east Manchester.

It was going to see 166 apartments built, 40 of which were for low-cost home ownership, along with ground-floor commercial space.

The revival, due to be completed by the end of the year, was made possible by a £2.5m grant from the Homes and Communities Agency, with the rest of the funding coming from the Clydesdale Bank.

But concerns over escalating costs led to the scheme, dubbed “a significant piece of the regeneration of east Manchester,” being put on ice once more.

In July, UKLP said it was hopeful a fresh funding package could be agreed to enable construction to re-commence by the end of the Summer. However, four months on, work has still not re-started.

Despite that, David Chilton, head of area for Greater Manchester at the HCA, said: “The Nuovo scheme remains a key priority for the HCA and we’re working closely with partners to agree a new funding package that will kickstart the redevelopment of the site.

“Nuovo is a landmark building that will provide much needed new homes for local people and support the continued revival of Ancoats and we’re hopeful that work will start on site in the new year.”

Nuovo was one of three Manchester schemes mothballed after Mr Issa's company, BS Construction, crashed into administration in May 2008. The following January, a fire broke out on the site.

Led by project director Paul Johnson, UKLP first began exploring the possibility of reviving the development in autumn 2009, examining the extent of the fire damage and quality of the previous workmanship.

But issues surrounding how much it would cost to complete led to work being halted. It is understood the Clydesdale will retain a stake but a new funding package will include other lenders. A Clydesdale spokesman said: "Discussions between the parties are continuing positively.”